0

Upward

And Forward

PROZONE INTU PROPERTIES LIMITED

Q3 FY20 RESULTS

UPDATE PRESENTATION

February 2020

1

TABLE OF CONTENTS

01

02

03

04

Quarterly Business Update

Financial Results

Asset Snapshot

Annexure

2

QUARTERLY BUSINESS UPDATE

3

339

227

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

Q3 FY19 Q3 FY20

Revenue (Rs. Mn)

Q3 & 9M FY20 – KEY HIGHLIGHTS

Q3 FY20 YoY Analysis

204 186

60.2% 81.6%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

220.0

240.0

Q3 FY19 Q3 FY20

EBIDTA (Rs mn) EBIDTA %

98 89 0.0

50.0

100.0

150.0

200.0

250.0

300.0

Q3 FY19 Q3 FY20

EBIDTA & EBIDTA Margin Cash PAT

903

673

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

9M FY19 9M FY20

9M FY20 YoY Analysis

571 541

63.2% 80.4%

-30.0%

-10.0%

10.0%

30.0%

50.0%

70.0%

90.0%

0.020.040.060.080.0

100.0120.0140.0160.0180.0200.0220.0240.0260.0280.0300.0320.0340.0360.0380.0400.0420.0440.0460.0480.0500.0520.0540.0560.0580.0600.0620.0640.0660.0680.0700.0720.0740.0760.0780.0800.0820.0840.0

9M FY19 9M FY20

EBIDTA (Rs mn) EBIDTA %

276 220

0.0

100.0

200.0

300.0

400.0

500.0

600.0

9M FY19 9M FY20

Revenue (Rs. Mn) EBIDTA & EBIDTA Margin Cash PAT

4

o Total Revenue during the quarter at Rs 296 mn & Rs 828.2 mn for 9M FY20

o Revenue from retail segment up 11% yoy in Q3 FY20 and up 17.9% yoy in 9M

FY20

Revenue 01

o Change in revenue mix led to increased margin.

9M FY20 EBITDA : Rs 541mn & margin at 80.4%

Q3 EBITDA at Rs 185.5 mn, with a 81.6% margin 02

Q3 & 9M FY20 RESULTS HIGHLIGHTS

o Cash PAT (PAT+ Depreciation) for 9M FY20 is Rs 220.2 mn, with 32.7% margin

CASH PAT Rs 88.9 mn, with a 39.1% margin 03

o Leasing of 93% at Coimbatore Mall & 76% at Aurangabad Mall

Strong Operating Parameters 04

5

Note- • Lease Rental & Related income and CAM Income received from Aurangabad Mall and Coimbatore

Mall.; Revenue from Real Estate Projects represent Revenues recognized from the Build & Sell model • Other Income represents Interest & Dividend Income on Investments etc

Q3 Result Update -

• Revenue and EBITDA during the quarter moved higher due to increased rentals at Aurangabad and Coimbatore Mall

• EBITDA margin during the quarter remained strong at 81.6%

• Attributable PAT has been positive reflecting stability in the underlying business

FINANCIAL RESULTS: CONSOLIDATED INCOME STATEMENT

Rs. Mn. Q3 FY20 Q3 FY19 YoY Q2 FY20 QoQ 9M FY20 9M FY19 YoY

Revenue from Real Estate Projects 0.3 134.7 - 3.3 4.5 336.8 -98.7%

Lease Rental & Related Income 227.0 204.5 11.0% 218.5 3.9% 668.2 566.6 17.9%

Total Income from operations 227.4 339.2 -33.0% 221.8 2.5% 672.7 903.4 -25.5%

Other Income 68.7 33.9 102.7% 50.0 37.4% 155.5 116.6 33.3%

Total Income including other income 296.0 373.1 -20.7% 271.8 8.9% 828.2 1,020.0 -18.8%

EBITDA w/o Other Income 116.9 170.4 -31.4% 126.3 -7.4% 385.5 454.5 -15.2%

EBITDA 185.5 204.2 -9.2% 176.2 5.3% 541.0 571.2 -5.3%

EBITDA Margin 81.6% 60.2% 2140 bps 79.5% 214 bps 80.4% 63.2% 1720 bps

Depreciation 82.8 87.2 -5.0% 84.1 -1.5% 247.9 250.4 -1.0%

Interest 119.3 89.5 33.2% 110.1 8.3% 325.6 247.4 31.6%

Profit before tax -16.6 27.5 - -18.0 -7.8% -32.5 73.3 -144.3%

Profit after tax 6.1 10.8 - -35.8 - -27.7 25.9 -

PAT after minority interest 3.1 2.5 - -26.1 - -21.3 -1.0 -

6

01 Aurangabad and Coimbatore mall leased out space currently stands at 76% and 93%

respectively, annuity income to increase significantly with ramp-up of Coimbatore mall revenue share income

03 Aurangabad Mall: 4 new stores of brands viz. Beccos, Titan, Go Colours & HP commenced

operations during Q3. Q3 retailer sales up by 13% on YoY basis. Strong Leasing Traction : 2 stores under fit-out and LOI Signed for 3 new stores would

add upto 14,059 sq ft. in operations in coming quarters.

02 Coimbatore Mall: 6 new stores started operations, adding aprox. 30,872 sq ft to operations in Q3 including M&S, Croma, Soch, One Plus, HP World & police

04 Nagpur retail: approvals in place & financial closure in advanced stage. Construction to commence on achieving of financial closure.

PROZONE INTU ON A STRONG FOOTING

7

04 COIMBATORE RESI

& INDORE LAND

03

NAGPUR SPV

02 COIMBATORE MALL

01 AURANGABAD MALL

Letting out the balance space and also maintain effective Brand mix by

continuously churning brands at the mall. Mall leasing gradually expected to

move towards 90% at Aurangabad

Leasing stands at 93%, working towards further increasing occupancy

Working towards building optimum mix of tenants

Application for Part OC has been submitted for four towers (264 flats) of Phase 1

upto the height mentioned in AAI Appellate Committee Minutes.

Planning for Nagpur mall construction completed, approvals in in place, strong

retailer traction, Financial closure in advance stage.

Construction in full swing for Coimbatore residential phase -1. Formal launch in

Q4 FY20 planned for boosting sales.

In Indore, pre launch sale of Plots with focus on faster monetization has

commenced.

CURRENT FOCUS AREAS

8

ASSET SNAPSHOT

9

Aurangabad Mall

Coimbatore Mall

Nagpur Mall

Aurangabad PTC

Nagpur Residential

Coimbatore Residential

OPERATING/DEVELOPMENT ASSETS

10

Key Operating Parameters Q3 FY20

Gross Leased Area (lakh sq.ft.) 5.3

Current Leasing Status 76%

Number of Stores Signed 113

Retailer Sales (Rs. Mn.) 791.5

Average Monthly Trading Density (Rs/sqft) 642

Footfalls (Mn.) 2.3

702.2 791.5

580.0 642.0

31.7

23.5

Q3 FY19 Q3 FY20

Retailer Sales (Rs mn) Trading Density (Rs psf) Footfalls (lakhs)

Footfall & Trading Density Occupancy

5.15

6.97 0.04 0.10 1.68

Operational

in Q3 FY20

Under Fit-out Signed till

date

Remaining

space

Size of the

Mall

RETAIL – AURANGABAD MALL UPDATE

11

Note 1 – Recoveries Include CAM as well as Other Charges such as HVAC, Electricity & Water Charges

• 4 New brands commenced operations at Aurangabad Mall in Q3 – Beccos, Titan, Go Colours, HP

• Sale of premises recorded revenue of Rs 0.35 mn, working with PTC buyers to arrange for financing to realise cash flows

• EBIDTA stands at Rs. 82.5 mn with margin of 67.2%, margin.

Operational Details (Rs. Mn.) Q3 FY20 Q2 FY20 Q1 FY20 Q4 FY19 Q3 FY19

Area Leased (lakh sq. ft.) 5.3 5.3 5.3 5.6 5.4

% Leased 76% 76% 76% 81% 83%

Sale of Premises 0.3 3.3 0.9 50.8 134.7

Rental Income 61.5 54.8 56.9 62.5 56.9

Recoveries (CAM & Other) 61.0 60.9 48.6 48.9 49.6

Total Income 122.8 119.0 106.4 162.3 241.2

EBIDTA 82.5 72.0 66.4 81.6 103.4

EBIDTA Margin % (as % of Total Income) 67.2% 60.5% 62.4% 50.3% 42.8%

EMPIRE MALL (AURANGABAD) – FINANCIAL SNAPSHOT

12

NEW STORES OPENED at AURANGABAD MALL

13

BRAND PARTNERS AT AURANGABAD MALL

14

Diwali Dhoom Festival

Winter Fiesta Fashion Show Christmas Carnival

EVENTS AT AURANGABAD MALL

Kid’s Club Audition

15

FINANCIAL SNAPSHOT - COIMBATORE MALL

760 864 815 840

22.1 23.4

Q3 FY19 Q3 FY20

Retailer Sales (Rs mn) Trading Density (Rs psf) Footfalls (lakhs)

Footfall & Trading Density Occupancy

4.65 5.01

0.01 0.00 0.35

Operational

in Q3 FY19

Under Fit-out Signed till

date

Remaining

space

Size of the

Mall

Key Operating Parameters Q3 FY20

Gross Leased Area (lakh sq.ft.) 4.6

Current Leasing Status 93%

Number of Stores Signed 119

Retailer Sales (Rs. Mn.) 864

Average Monthly Trading Density (Rs/sqft) 840

Footfalls (Mn.) 2.3

16

* - Recoveries Include CAM as well as Other Charges such as HVAC, Electricity & Water Charges

# – Recoveries of Q3 FY20 includes Rs 23.3 mn sundry balance write back.

Operational Details (Rs. Mn.) Q3 FY20 Q2 FY20 Q1 FY20 Q4 FY19 Q3 FY19

Area Leased (lakh sq. ft.) 4.6 4.7 4.6 4.5 4.4

% Leased 93% 95% 92% 90% 89%

Rental Income 79.5 78.5 79.7 80.1 71.1

Recoveries (CAM & Other)* 72.0 # 47.2 47.7 43.1 38.3

Total Income 151.5 125.7 127.4 123.2 109.4

EBIDTA 97.0 93.5 98.8 94.7 89.9

EBIDTA Margin % (as % of Total Income) 64.0% 74.3% 77.6% 76.9% 82.2%

• Rentals income improved during the quarter due to opening of new stores.

• 6 stores opened during the quarter including HP World, Croma, Soch, One Plus, M&S, Police

• Strong performance continues with EBITDA of Rs 97 mn during the quarter

FINANCIAL SNAPSHOT - COIMBATORE MALL

17

NEW STORE OPENING AT COIMBATORE MALL

18

Children’s Day Celebration Global MIC night

EVENTS AT COIMBATORE MALL

KTM Orange Day Food Fest

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BRAND PARTNERS AT COIMBATORE MALL

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______________________________

• ~1.9 m sqft of residential

______________________________

• 7 towers of 18 floors

comprising 1,152

apartments

______________________________

• 3 towers of 18 floors

comprising 540 apartments

planned in phase 1.

• Construction in full swing for

Phase 1.

______________________________

• Amenities:

Club house, swimming pool

tennis court, amphitheatre,

squash court, gymnasium

____________________

RESIDENTIAL UPDATE

Total Units –

Phase 1

540 Units

Units

Sold

60 units

Launch of

Project

Q3 FY 20

Construction

Started

Q1 FY 20

PROJECT UPDATE - COIMBATORE - RESIDENTIAL

Coimbatore Residential (CGI) Actual

Actual

21

Units Launched

336 Units

Units

Sold

272 units

Sale Value

Rs. 1,713 mn

Cash

Collection

Rs. 1,265 Mn

______________________________

• 0.5m sqft of retail space under

advanced stage of approvals

• 0.39m additional development

potential

______________________________

• 4.5m catchment population

______________________________

• 15.7 acres of residential under

development

______________________________

• 4 towers of 14 floors comprising 336

apartments under advance stage

of completion in Phase 1.

Application for Part OC has been

submitted for 264 apartments

______________________________

• Amenities:

Club house, swimming pool

tennis court, amphi theatre, cricket

court, meditation centre,

gymnasium

______________________________

Nagpur mall design (CGI)

RESIDENTIAL UPDATE

PROJECT UPDATE – NAGPUR

22

NAGPUR RESIDENTIAL

Actual

Actual

Actual

23

• 1.9m city population

• Prominent business and

industrial centre in Madhya

Pradesh

______________________________

• 43.5acres comprising

residential township with 5

acres for commercial to be

developed in phases

• Phase 1&2 is for plotted

development of about 200

units for better monetisation

• Phase 3&4 will be high rise

development of about 800 apartments

• Amenities:

Club house, swimming pool

tennis court, amphi theatre,

cricket court, meditation centre, gymnasium

Indore clubhouse entrance (CGI)

Indore township design (CGI)

PROJECT UPDATE - INDORE RESIDENTIAL

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Generic Disclaimer

The following is a general overview of Prozone INTU Limited (the “Company”) and is qualified in its entirety by reference to the applicable offering

memorandum, memorandum and articles of association or other constitutional documents and subscription agreement (together the “Investment

Documents”) relating to the purchase of interests in the Company, all of which will be available upon request from the Company’s administrator and

should be reviewed carefully prior to making an investment decision. This overview is being furnished on a confidential basis for discussion purposes only

to a limited number of persons who may be interested in this type of investment. Neither the information nor any opinion expressed herein constitutes a

solicitation or recommendation by anyone of the purchase or sale of any securities or other financial instruments. Any reproduction or distribution of this

overview, in whole or in part, or the disclosure of its contents, without prior written consent is prohibited.

Nothing in this document constitutes accounting, legal, regulatory, tax or other advice. Any decision to subscribe for interests in any company must be

made solely on the basis of information contained in, and pursuant to the conditions of, the Investment Documents, which information may be different

from the information contained in this document. Recipients should form their own assessment and take independent professional advice on the merits

of investment and the legal, regulatory, tax and investment consequences and risks of doing so. Neither the Company nor the Investment Managers

accepts any responsibility to any person for the consequences of any person placing reliance on the content of this information for any purpose.

The information contained in this document, including any data, projections and underlying assumptions, are based upon certain assumptions, management forecasts and analysis of information available as at the date hereof and reflects prevailing conditions and the Investment Manager’s

views as of the date of the document, all of which are accordingly subject to change at any time without notice, and neither the Company nor the

Investment Manager is under any obligation to notify you of any of these changes. In preparing this document, we have relied upon and assumed,

without independent verification, the accuracy and completeness of all information available from public sources or which has been otherwise

obtained and reviewed by the Investment Manager in preparing this overview. While the information provided herein is believed to be reliable, neither

the Company nor the Investment Manager makes any representation or warranty whether express or implied, and accept no responsibility for, its

completeness or accuracy or reliability. Prospective investors should carefully consider these risks before investing.

Past performance information contained in this material is not an indication of future performance. Similarly where projections, forecasts, targeted or illustrative returns or related statements or expressions of opinion are given (“Forward Looking Information”) they should not be regarded by any recipient

of this material as a guarantee, prediction or definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to

predict and will differ from assumptions. A number of factors, in addition to any risk factors stated in this material, could cause actual results to differ materially from those in any Forward Looking Information. There can be no assurance that the Company’s investment strategy or objective will be

achieved or that investors will receive a return of the amount invested.

DISCLAIMER

25

THANK YOU

Email: investorservice@prozoneintu.com

Website: www.prozoneintu.com

Mehul Mehta/ Nachiket Kale Dickenson IR Contact: 9820280325/9920940808

Email: nachiket.kale@dickensonIR.com

26

ANNEXURE

27

STRONG PEDIGREE

• The Promoters hold 30.4%, INTU holds 32.4% and balance is held by public1

• Intu Properties is UK’s Largest Retail Real Estate Company.

• Intu Properties plc is a UK FTSE 100 listed Company owning and managing assets worth more than 10 bn pounds. They own more than 20 properties across UK and spain, 10 of which are among the top 25 shopping centers in the UK, representing ~

38% UK market share.

• Intu Properties plc has more than 22mn sqft of retail space; 400 million customer visits a year

BUSINESS OVERVIEW

• Prozone Intu Properties Ltd. (Prozone Intu) is jointly developed by Promoters and Intu Properties Plc set up to create, develop and manage world-class regional shopping centres and associated mixed-use developments Pan-India.

• Prozone Intu strategy is to participate and dominate in the retail space in Tier 2 and 3 cities in which robust urbanization is expected, which will result in growth of consuming middle class from 300 to 500 million in next 5 years

• Key Business Strategy - Develop Large scale Land Parcels for Mixed Use development with 75% of the Land to be developed as Residential & Commercial – Build & Sell model whereas 25% of the Land to be developed as Retail – Build & Lease Model

FULLY PAID UP LAND BANK &

ROBUST BALANCE SHEET

• The Company has 17.79 mn sq. ft. of fully paid-up land bank in prime locations with 1.2 mn developed till date and more

than 16.5 mn sq. ft. balance to be monetized which is being developed in different phases .

• Robust Balance sheet with Low Leverage.

• At current valuation, the Land bank valuation for the company is expected to be Rs. 20,000 mn

1: As on 31 December 2018

ABOUT US

28

Business Strategy

• Develop Large scale Land Parcels for Mixed Use development.

• 75% of the Land to be developed as Residential & Commercial – Build & Sell model

• 25% of the Land to be developed as Retail – Build & Lease Model

• The Company follows this model so that the Cash Flows from Build & Sell portfolio facilitate the Build & lease model, Thus resulting into Debt Free

Annuity Assets and free cash flows for future developments.

Residential Projects - Strategy

• The Company invests and develops the entire Clubhouse and Site Infrastructure for the project upfront before the Launch of the Project.

• It provides credibility to the business and accelerates the sale of the project, resulting into better cash flows.

• Due to this, the Company emerges as the strongest and the most credible player in the region. Eg, In Nagpur, Company has received an over

whelming response as compared to the other established players in the region.

Mall Development - Strategy

• Dominant regional shopping and leisure destination

• Design-G + 1 Mall horizontal model with racetrack circulation

• Infrastructure-Large parking spaces planned to cater for future growth

• Tenant Mix- Well planned tenant mix with category focus to aggregate consumption

UNDERSTANDING OUR BUSINESS MODEL - BUSINESS STRATEGY

29

Cash

Sales

Model

Residential &

Commercial

Developments

Yield

Lease

Model

Regional Malls

under own

Management

FUTURE GROWTH

Debt Free

Assets

Profits &

Shareholder

Value

Large scale

land parcels

for mixed use

developments

• Locations selected in high growth corridors within city limits

• Execute high quality retail assets at the right price and the right time

• Develop and sell mixed-use assets to facilitate retail investments

UNDERSTANDING OUR BUSINESS MODEL - BUSINESS STRATEGY

30

Nikhil Chaturvedi

Salil Chaturvedi Co-Founder, and Deputy Managing

Director, Salil’s vision has charted

the strategic direction of the

Company. He leads business

development, land acquisition and

new asset class initiatives in the residential and commercial sectors

Punit Goenka Mr. Goenka, Director of Essel Group, is CEO of Zee Entertainment Enterprises Limited, managing one of India’s most successful TV and Media businesses. He has an extensive, diversified background in the areas of media, entertainment, and tele-communications in global markets

Dushyant Sangar

Mr. Dushyant Sangar is the Corporate Development Director of Intu Properties plc and is a member of Intu's Executive Committee which is responsible for the day to day operations of the business. He has overall responsibility for Intu’s acquisitions, divestments and joint venture transactions. Prior to Intu, Dushyant worked for MGPA & UBS

Deepa Harris (Independent Director)

Ms. Deepa Misra Harris is Founder &

CEO of BrandsWeLove Marketing

and Branding Services. Specialist in

Branding, Marketing and Sales,

Deepa has over 30 years experience

in the luxury and hospitality

category.

OUR BOARD OF DIRECTORS

Founder and Managing Director,

Nikhil is a visionary and hands-on

leader, who inspires the

organisation with a passion for

excellence and single-mindedness

to build shareholder value, which is

his driving force

Umesh Kumar (Independent Director)

Mr. Umesh, has over 35 years of diverse experience at senior positions in the IAS, mostly in economic sectors, infrastructure, investment and finance, both at Government of India and Government of Rajasthan as well as managing the largest Public Sector Undertakings in Rajasthan.

31

Shareholding in % – Dec 2019

Key Investors Holding (%)

ACACIA Partners 1.47%

Aditya Chandak & Family 1.78%

Rakesh Jhunjhunwala 2.06%

Rajesh Narang 1.52%

Source: BSE

Promoter,

30.44%

Intu

Properties,

32.38%

FII, 7.67%

Others,

29.51%

SHAREHOLDING UPDATE